Aadhar Housing Finance up 5% as multiple brokerages initiate 'buy' coverage

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Shares of Aadhar Housing Finance rose nearly 5 per cent on Thursday after DAM Capital and Asian Markets Securities initiated coverage with a 'buy' rating for the stock, citing a granular presence and a healthy blend of sourcing channels.

 

Aadhar Housing Finance’s stock rose as much as 4.65 per cent during the day to ₹422 per share, the biggest intraday gain since March 7 this year. The stock pared gains to trade 4.02 per cent higher at ₹419.45 apiece, compared to a 0.46 per cent advance in Nifty 50 as of 1:08 PM. 

 

Shares of the company snapped their five-day losing streak on Thursday. The stock has fallen 0.85 per cent this year, compared to a 0.22 per cent fall in the benchmark Nifty 50. Aadhar Housing Finance has a total market capitalisation of ₹18,066.38 crore, according to BSE data. 

 

Aadhar stands out among its peers due to its better geographic coverage and diverse sourcing channels, according to DAM Capital. The brokerage firm noted that a 20-22 per cent growth target would help balance these channels while maintaining quality. 

 

DAM Capital assigned a target price of ₹525 per share, a potential upside of 25 per cent from the current price. Relatively higher return on assets (RoAs) would ensure better return on equity (RoE) at peak leverage compared to peers like Aavas, DAM capital said. "We expect RoEs to be 16-17 per cent over financial year 2025-27 and could peak at 18 per cent before the next raise kicks-in."

 

Meanwhile, Asian Markets Securities' 'Composite Index Framework' positioned India Shelter and Aadhar Housing Finance as their preferred pick in the sector. The brokerage initiated coverage on the company with a 'buy' call and a target price ₹570 apiece. The composite index supports expectations that Aadhar and India Shelter will achieve over 4 per cent RoA in the next two years and record asset under management (AUM) CAGRs of 20 per cent and 32 per cent over FY24–27, it said. 

 

Aadhar distinguishes itself through superior diversification - with no state contributing over 14 per cent of its AUM and the top three states accounting for roughly 40 per cent, analysts at the brokerage firm added. All eight analysts tracking the company have a 'buy' rating on the stock, according to Bloomberg data.